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Stocks Gain With S&P 500 Futures; Brent Crude Near Month-Low
Stocks rose amid optimism central banks will continue to support the global economy. Brent crude traded near a four-week low.
European and Asian equities climbed from the lowest levels in at least three weeks and U.S. futures indicated stocks will extend gains from Friday when manufacturing and jobs data signaled the economy was strengthening. France’s phone companies tumbled after a deal to consolidate the nation’s telecommunications industry fell apart. Brent was little changed near the lowest since March 3 after Saudi Arabia’s deputy crown prince said last week the world’s biggest oil exporter will freeze output only if Iran follows suit.
“Investors are slowly getting more comfortable with the state of the global economy and the ability of central banks to steer the recovery,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, Germany. “Today we have some of that optimism spilling over from last week.”
U.S. stocks climbed the most in a month last week after Federal Reserve Chair Janet Yellen reaffirmed any interest-rate increases will be gradual. The European Central Bank will continue to act “forcefully” if needed, Executive Board member Peter Praet said on Monday.
Stocks
The Stoxx Europe 600 Index added 1.1 percent at 7:33 a.m. in New York, and the MSCI Asia Pacific Index increased 0.3 percent. Futures on the Standard & Poor’s 500 Index gained 0.3 percent.
While U.S. equities erased annual losses and closed at their highest level of the year on Friday, the rebound in European shares has stalled for more than two weeks. With a valuation of about 14.7 times estimated earnings, the Stoxx 600 traded at its lowest level since January 2015 relative to the S&P 500 on Friday.
Health-care stocks and utilities led the advance in the Stoxx 600, with trading volume 19 percent less than the 30-day average. Orange SA lost 4.6 percent and Bouygues SA plunged 15 percent after a merger deal between the two collapsed, denying a consolidation that would have eased competition. Peer Altice NV tumbled 15 percent.
Greece’s ASE Index lost 1.6 percent after International Monetary Fund Managing Director Christine Lagarde said the IMF is “a good distance away” from an agreement that would allow for additional loans to Europe’s most indebted state. Bonds dropped, sending two-year yields up 219 basis points to 11.10 percent.
Emerging Markets
The MSCI Emerging Markets Index rose 0.3 percent, rebounding from a 1.3 percent drop on Friday, its worst one-day slide in more than two weeks. Technology and health-care stocks led the advance while energy producers declined. Markets were closed in China, Hong Kong and Taiwan for holidays.
The Borsa Istanbul 100 Index rose 1.7 percent and the yield on two-year notes slide seven basis points to 9.9 percent. Turkish inflation dropped more than forecast, giving the central bank more room to keep cutting rates.
Commodities
Brent crude added 0.5 percent to $38.87 a barrel, after falling as much as 1.4 percent. West Texas Intermediate crude increased 0.4 percent to $36.93 a barrel.
Copper dropped 0.8 percent on the London Metal Exchange. Chile’s Codelco has warned it doesn’t see a recovery starting until 2018 and Barclays Plc analysts reiterated their bearish outlook on Monday. Weaker currencies in producer nations and lower oil prices are helping suppliers trim costs, curbing the need to make output cuts, according to Societe Generale SA.
Bonds
Treasuries were little changed, with 10-year note yields at 1.77 percent. The rate on benchmark German bunds rose one basis point to 0.15 percent.
Australian government notes gained, with yields on debt due in a decade down six basis points to 2.47 percent. Rates on similar-maturity Japanese bonds fell 1.5 basis points to minus 0.085 percent.
Currencies
The Aussie weakened 0.8 percent to 76.17 U.S. cents, after climbing 2.3 percent last week. Retail sales were little changed in February from a month earlier, a report showed, missing economists’ forecast for a 0.4 percent gain. The nation’s central bank reviews monetary policy on Tuesday, when it’s expected to hold borrowing costs at a record low.
The yen was little changed at 111.68 per dollar after jumping 0.8 percent on Friday amid the greenback’s retreat. The won strengthened 0.7 percent.
The ruble sank 1 percent, falling for a second day, and South Africa’s rand slid 0.4 percent. India’s rupee climbed to the highest this year before foreign investors bid for quotas on the country’s bonds.
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